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🗞️ DOL Puts Bad Actors on Notice: EBSA Resets Its Enforcement Compass

The DOL's EBSA issued FAB 2026-01, shifting its enforcement focus to egregious misconduct, fairness to fiduciaries, senior leadership oversight, and timely investigations, signaling a more targeted, rule-of-law approach.

onthelaborfront

14 Apr 2026 — 3 min read

The Labor Department moved on April 14, 2026, to update the internal enforcement guidelines of its employee benefits arm, issuing Field Assistance Bulletin 2026-01 and directing the Employee Benefits Security Administration to concentrate its investigative resources on clear-cut wrongdoing. The shift reflects ongoing debate over how broadly EBSA should interpret its enforcement mandate, with industry groups arguing that past practices reached beyond clear legal authority and worker advocates contending that aggressive enforcement is necessary to protect beneficiaries.

The bulletin, signed by Assistant Secretary Daniel Aronowitz, lays out four governing principles. Investigators will prioritize cases involving outright breaches of fiduciary loyalty, criminal misuse of plan assets, and direct conflicts of interest. Prudence-based cases, which hinge on whether fiduciaries followed sound processes rather than whether they achieved particular results, will receive less attention unless also accompanied by evidence of disloyalty. The bulletin explicitly states that fiduciary investment decisions motivated by environmental, social, and governance objectives, rather than the financial interests of plan participants, could constitute a breach of the duty of loyalty under ERISA.

The directive instructs investigators that novel legal theories cannot be developed through enforcement actions alone. Instead, new interpretations of ERISA, the 1974 law governing private employee benefit plans, must go through formal rulemaking or published sub-regulatory guidance before they can serve as the basis for an investigation. Any exceptions require written sign-off from both the Director of Enforcement and the Assistant Secretary.

In response to longstanding complaints from Congress and plan sponsors about slow-moving investigations, the agency has set firm internal timelines: 18 months for routine matters and 30 months for complex ones. Senior leadership must also be briefed at least two weeks ahead of significant enforcement actions, settlements, and novel legal initiatives, a requirement designed to bring greater consistency across the agency's regional offices.

The FAB also addresses two concurrent issues. First, it instructs that all pending ESOP valuation investigations must be reviewed against the fairness principle, citing a Congressional directive requiring EBSA to establish standardized valuation procedures for employee stock ownership plan shares, a directive the agency has not yet fulfilled. This is separate from, but related to, an earlier decision: on January 15, 2026, EBSA removed ESOPs entirely from its national enforcement project list for fiscal year 2026. Second, the DOL's Inspector General is actively investigating whether EBSA investigators improperly coordinated with private plaintiff law firms pursuing related litigation, a probe that Aronowitz acknowledged in a footnote and said could prompt further revisions to the bulletin. The FAB explicitly bars any conduct that creates even the appearance of such coordination.

The bulletin builds on EBSA's January 15, 2026, national enforcement project list, which identified cybersecurity, mental health and substance use disorder benefits, benefit distributions, retirement asset management, surprise billing protections, and criminal abuse of contributory plans as the agency's top investigative priorities for the fiscal year. The agency oversees benefit plans covering more than 156 million workers, retirees, and their families, with roughly $13.8 trillion in combined assets at stake.

Key Points

EBSA issued FAB 2026-01 on April 14, 2026, reorienting enforcement toward "true bad actors" rather than broad fiduciary second-guessing.
All enforcement activity must be grounded in the plain text of ERISA, established regulations or sub-regulatory guidance, or clearly settled case law.
Senior EBSA leadership must be notified at least two weeks before significant enforcement actions, settlements, or novel legal initiatives.
Routine investigations must close within 18 months; complex cases within 30 months.
ESG-motivated fiduciary decisions inconsistent with participants' best financial interests are cited as a potential loyalty breach.
ESOP valuation investigations are paused pending Congressional-mandated valuation standards.
A DOL Inspector General investigation into improper coordination between EBSA staff and private plaintiff attorneys is ongoing and may prompt further updates to the FAB.
EBSA oversees benefits for over 156 million workers and retirees, covering roughly $13.8 trillion in plan assets.